Privatisation of gas transportation system never raised at gas talks - Ukraine

Yanukovich said Ukraine is preparing to upgrade it gas transportation system

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KIEV, June 19 (Itar-Tass) - Privatisation of the Ukrainian gas transportation system has never been raised at the gas talks, President Viktor Yanukovich said at a meeting with parliament and its faction leaders on Wednesday, June 19.

“The word privatisation has never been used at any talks, with no one. These are just rumours or conjectures, maybe even provocation. But we do not live by rumours,” he said.

Yanukovich said Ukraine is preparing to upgrade it gas transportation system to keep its reliable and fit for transporting “certain amounts” of gas.

He believes that this can be done by “pooling efforts of consumers, transit operators and gas suppliers.”

According to the president, the format of the future consortium to run the gas transportation system should be trilateral to include Ukraine, Russia and the European Union.

Yanukovich said earlier the system could be leased but the government would retain ownership rights to it. “It is important that the joint venture is not a monopoly, and Ukraine has equal access to the pipelines,” he said on March 1, adding that EU countries could participate in the modernisation of the system “if they wish so.”

“We will welcome them. We want to create such a model of cooperation to operate the Ukrainian gas transportation system that will be comfortable for everyone,” the president said.

Ukraine will choose such a form of consortium for running its gas transportation system that will be “most beneficial” for the country in order to ensure “sufficient gas transit volumes” and control over the gas transportation system, Energy and Coal Industry Minister Eduard Stavistky said earlier.

Ukraine is conducting negotiations “with all interested parties” and considering several options, including a bilateral consortium with Russia or a trilateral one with Russia and Europe.

Which will be chosen remains to be seen. “Negotiations are underway and I can’t answer this question now,” the minister said.

Russia earlier proposed a bilateral consortium for running Ukraine’s gas transportation system, but official Kiev insists that the European Union be a member of the consortium as a gas consumer.

In January 2012, the European Commission sent a letter to the Russian Energy Ministry offering mediation in the gas talks between Moscow and Kiev.

Ukraine may create a bilateral consortium with Russia for running the Ukrainian gas transportation system, National Security and Defence Council Secretary Andrei Klyuyev said.

However he believes that a trilateral consortium of Ukraine, Russia and the European Union would be better than a bilateral one. “I think that a trilateral consortium is better than a bilateral one today,” he said.

He noted that all conditions and risks have to be considered. “Our national interests are the main factor. And they are that Russian gas supplies to Europe must definitely go through Ukraine in the future and in the ever growing volumes,” he said.

The throughput capacity of the Ukrainian gas transportation is 288 billion cubic metres system at the entrance and 178.5 billion cubic meters at the exit, including 142.5 billion cubic metres to European countries and 3.5 billion cubic metres to Moldova. Natural gas transit through Ukraine to Europe and CIS countries in 2011 increased by 5.7 percent from 2010 to 104,197,067,000 cubic metres, including to Western Europe by 5.9 percent to 101,098,013,000 cubic metres, but decreased by 2.4 percent to 3,099,054,000 cubic meters to CIS countries.

Ukraine’s gas transportation system consists of 72 compressor stations, 110 production shops and 1,451 gas distribution stations. The overall length of gas pipelines operated by the company is 38,600 kilometres, including 22,200 kilometres of trunk pipelines and 16,400 kilometres of extensions.